Guest Post: The RCE Cliff

A recent PatentlyO posting noted that the growth in Request for Continued Examination (RCE) filings has leveled off. It appears that RCE filings have become less desirable, at least in part because the PTO is now responding to them much more slowly. Changes to the "count" system and RCE docketing implemented by the PTO in 2009 have resulted in significant increases in both the RCE backlog and the pendency from RCE filing to the next Office Action. The PTO dashboard shows a near doubling in two years, with the RCE backlog increasing from under 50,000 in October 2011 to over 95,000 in September 2012, and pendency from RCE filing to the next Office Action going from an average of 2.7 months in October 2011 to 5.9 months in September 2012 (see http://www.uspto.gov/dashboards/patents/kpis/kpiBacklogRCEDrilldown.kpixml and http://www.uspto.gov/dashboards/patents/kpis/kpiRCEtoOFCACTION.kpixml). The current 5.9 month pendency from RCE filing to the next Office Action may not seem particularly long to many. However, anecdotally, we are aware of an increasing number of cases in which the pendency is over two years, suggesting a significant increase in post-RCE-pendency variability as well.

To quantify and expand on our anecdotal observations about the increase in pendency, we turned to PatentCoreTM, which is a database that provides a variety of statistics derived from file histories of more than 6 million applications. PatentCoreTM provided us with a list of all utility applications in each of five art units (1618 – Organic compounds; 1644 – Drug, bio-affecting and body treating compositions; 2161 – Data processing: database and file management or data structures; 2822 – Semiconductor device manufacturing: process; and 3622 – Data processing: financial, business practice, management or cost/price determination) in which an RCE was filed between October 1, 2002 and October 1, 2012. For each of these applications, the following information was collected: the date of the RCE, the date of the next PTO action and the type of the next PTO action (Office Action, Notice of Allowance, or Notice of Abandonment). Next-action Notice of Abandonments were rare and seemed to follow unusual fact patterns, so we excluded these cases from our data set.

For each art unit, we asked the following question for each fiscal year (FY) between 2003 and 2012: what percentage of the applications having RCEs filed in the given FY received a next Action (i.e., an Office Action or Notice of Allowance) within 3 months, 6 months, 1 year, 2 years or 3 years from the RCE filing?1

The Figures accompanying this post show the results of our analysis. Each subplot corresponds to a different art unit. The x-data indicates the FY of RCE filings. The y-data (% Examined) indicates the percentage of the applications with RCE filings in the fiscal year that received a next Action within a given time period following the RCE filing. The color of the data symbols indicates the duration of that time period. Thus, the first red data point in the top graph indicates that, for applications in art unit 1618 for which an RCE was filed in fiscal year 2003, 64.6% of those applications received an Office Action or Notice of Allowance within 3 months from the RCE filing. Not surprisingly, for a given fiscal year the percentage examined increases as longer durations are considered.

Of note, however, is how dramatically the data changes across fiscal years. For example, averaging across the five art units, the percentage of applications examined within three months in FY 2012 was less than half (43.7%) the percentage of applications examined within three months in FY 2003. The trends are most striking in the business-method art unit (3622) and the chemistry art unit (1618). For example, in FY 2011, only 52% (art unit 3622) and 25% (art unit 1618) of RCE filings received a next Action within two years of the RCE filing.

Ideally, the PTO will address this type of art unit-specific pendency data in its approach to tackling the increasing RCE-backlog problem. In the meantime, practitioners should be prepared to adjust prosecution strategies in view of the trends. In instances in which fast patent procurement is desirable, several options exist to attempt to avoid potential long RCE backlogs. First, in view of this data, practitioners may wish to be more conscientious about how they respond to first Office Actions (e.g., entering amendments less cautiously).

Second, practitioners can use services such as PatentCoreTM to review art-unit- or examiner-specific data identifying RCE backlogs and determine whether appealing a rejection is a more desirable (and potentially faster) way to respond to a final rejection as opposed to filing an RCE. Third, practitioners can consider filing a continuation instead of an RCE. Finally, while expensive, the Track One prioritized examination initiative by the PTO provides an opportunity for examination of an application to be accelerated following an RCE filing.

1 For recent years, this query entailed identifying all applications for which sufficient time had passed since the RCE filing to answer the query. For example, if a set of applications had RCE filings in September 2012, it would be too soon to calculate what percentage of these applications received a next Action within 6 months from the RCE filings.

IP laws are an absurdity. The sooner we abolish IP laws, the sooner that society can get back to being innovative and productive. “Gee, why don’t we give patent examiners more examining time to get higher quality patents” is what so many pro-patent people lament – however, the brutal truth is, IP laws cannot logically work as intended, cannot work and will never work. The IP system cannot be “fixed” or improved in any way. The real “fix” is simply outright abolishment. The IP law system serves to feed parasitic, rent-seeking patent layers, not for the benefit of society.

The real problem is that patents can be game-changers and upset the status quo of established (big corp) concerns.

That is the real problem.

Sure Big Corp can play the game too and legitimately invent around others’ advances to ring in that advance. Contrary to what Ned may indicate, this itself is NOT a problem. That is part of the fabric of the patent system, deepening the quilt of the state of the art (it is critical to remember – patents are NOT only for linear advances in art – something far too often not remembered). But this actually takes effort to invent as opposed to the naked power of size and money alone.

But the fact that a single patent can change the competitive landscape and can be the sling of David that slays the giant is what drives the attempts by Big Corp to diminish patent rights, or to make the law difficult and obscure, or to demean those who can assert rights (without being held hostage to patent armageddon, wherein a cross license would NEED to be taken).

Big Corp has a double-edged attack, and the goal is weaker (or non-existent) patents. One thrust of that attack is to buy up as much of the smaller and less innovative advances as possible. The other thrust is to attack the very structure of the patent system itself. Congress has been captured, and Trade Secrets have gained an unparalleled “respect” in patent law. Academia too has been captured. Appealing to the natural leftist leanings is quite easy, but of course, Big Corp is not actually behind any sense of Academia’s “no property” philosophy – only that property which may disrupt their hegemony.

Patents are truly the great equalizer, for the exclusivity of the reward for invention is not tied to the prospects of the inventor, or the size of the behemoth that invents. Think i4i.

Patent rights should be made stronger, not weaker (with concomitant clarity – and we already have laws in place for that). It is stronger and clearer rights that will cut back on the already low litigation rates (itself a smokescreen employed to paint patents as an evil nuisance). It is only when weakness is sensed that litigation becomes a more desirable option. It is also important to blow away the smokescreen that litigation itself is “bad” as our system is built upon the premise that litigation is the enforcement mechanism of (yes valid) patents.

As Ned indicates, follow the money behind the passage of the AIA – it leads to the very same people that coined the pejorative term “Troll.” The assault on patents is in play by the big conglomerates and the left (the anti-property people) are duped. The left who have a distaste for any property think that by weakening patents their larger agenda is more readily achieved. They are blind. The only result will be that entrenched power will stay entrenched and other market forces will be more effective in congregating wealth into the hands of the few, and the realization that the tool for breaking that stranglehold (patents) has been emasculated will be only too late to be effective.

As to Beaker and GhostFacePatentAppKillah (and the rest of the Boldren and Levine disciples), I get the propaganda you wish to spread – I really do understand “your message.” But before you post that empty crrp again, please be prepared to provide what I have repeatedly asked of you: give me one (yes, one single) example of a modern advanced society that has bought into your “Utopian” world view without IP law. In a perfect world, communism would be a great thing. But reality intrudes, and we simply do not live in that perfect world, and thus you do not – as you cannot – provide even a single example of a modern advanced society that has not embraced IP law as a critical component of advancing society. Until you can overcome this glaring fact, all you have is an (empty) agenda.

Your “open sharing” would only benefit those already in power and make them more powerful, as the great equalizer of patents would not be available. In essence, you would force David into the Octogon against Goliath on Goliath’s terms. And when Goliath emerges from the Octogon with David’s head ripped from his body, and then invites you into the Octogon, you will have nowhere to turn.

Patent Holdup. How often we have heard that term and how often we have heard it is a problem with trolls. But the lead item is about Microsoft imposing a licensing fee on all Android phones for the use of trivial patents, the example given is a patent on the scheduling of meetings.

There might be a problem with trolls, but there is also a problem with patent aggregators who amass large piles of trivial patents and use muscle to impose royalties on others. These folk do not enrich society. They are a burden.

We really need to look at patent aggregators who tend to be the largest of our businesses, not small investors who are seeking to recoup some of their investment in new technology by licensing their truly valuable patents. The big aggregators are the real problem. But they also brought you the AIA, so we know Congress is not going to look hard at these folks.

@GhostFace: This is a great and informative article – hopefully, the more info. like this that percolates throughout the world, people will take notice and take measures to make patents weaker and ultimately lead to the complete extinction of patent and copyright law. Society will eventually come to its senses and see the benefits of a world without IP law.

Thanks for that. Also in Europe, I see a rash of patent-focussed publications by banks. I imagine top people in each such bank sitting in a marketing meeting and agreeing to polish the bank’s reputation by showing the world that “We know all about patents.”

What is making them do this? Tablet wars and cellphone wars, I suppose.

But I could take the authors more seriously if they could at least spell ordinary everyday words correctly. See, as just one example, “enormeous” all the way through the Paper.

I was told by three examiners in three different art units that due to the emphasis on reducing the backlog of unexamined applications, they were only required to examine one RCE per bi-week. That would certainly affect timing.

“Maybe you can randomly pull one of the patents that issued today and share it ”

I don’t have access to that. However here is a business method claim for you to face, or run from.

1. A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:

providing said computer with a data base for said press including at least, natural logarithm conversion data (1n), the activation energy constant (C) unique to each batch of said compound being molded, and a constant (x) dependent upon the geometry of the particular mold of the press,

initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure,

constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding,

constantly providing the computer with the temperature (Z),

repetitively performing in the computer, at frequent intervals during each cure, integrations to calculate from the series of temperature determinations the Arrhenius equation for reaction time during the cure, which is
1n v=CZ+x where v is the total required cure time,

repetitively comparing in the computer at frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time,

and opening the press automatically when a said comparison indicates completion of curing.

“Probably not, but I have no idea what earlier disagreement you’re referring to.”

LOL – of course not. You subscribe to the same “What the Sam Hill” denial of reality that MM uses.

I am sure if you review recent threads on this subject matter you can find your grand pronouncement that that Office cannot under ANY timeframe control the RCE prior to three year guarantee date (and see my pristine counter to your ianity).

Of course, I would prefer a simple “You are right again anon,” rather than your continued flailing about.

It’s not a shell game. In a shell game, there is only one pea under a possible multitude of shells.

What we have here are deck chairs on the Titanic. In fact, in this analogy, instead of lifeboats, the crew loaded extra deck chairs before leaving harbor. There are plenty of deck chairs in all of the pertinent queues: unexamined applications, examined (but not completed applications, RCEs, Appeals (and the hidden nooks and crannies related to that process).

All of these things have one thing in common: a full, diligent and competent examination would drain the swamp and shoot the alligators at the same time.

The focus should always have been on the examination – not the applicants, not the post-grant owners, and not trying to have less innovation and less applications.

Probably not, but I have no idea what earlier disagreement you’re referring to.

All I said was that one very unlikely thing was slightly less unlikely than another very unlikely thing, and that it would completely subvert both the legislative intent and your point about public backlash.

Granted, you’d get some applicant backlash at that point, but if you think about it, all the applicants’ remedies for the PTO not acting quickly enough seem to take an awful lot of time to be resolved.

You can’t meaningfully guarantee something like that anyway, even if it is the “right thing to do”, and even if applicants would prefer it (though opinion is sharply divided on the point).

How would you propose to enforce such a “guarantee”? Get the courts to order specific performance? You can’t get that for more or less the same reason you can’t get an automatic injunction for patent infringement.

KIP, somewhat answering my own question, I think that one that if the RCE is filed prior to the date the examiner files his answer, or 4 months from the filing of one’s own appeal brief, one should be able to file the RCE if the RCE is beyond 3 years.

I say this because section (A) seems to include the portion of the appellate process up to the examiner’s reply as normal prosecution, and not a delay caused by the Board.

See:

“(ii)respond to a reply under section 132, or to an appeal taken under section 134, within 4 months after the date on which the reply was filed or the appeal was taken”

Maybe you can “randomly” curtail your abject disdain founded on nothing but your personal agenda and cabin those insults to align with what the law fully allows, and we won’t have to deal with your attempted train wrecks on legal matters.

Your vacuous and conclusory post -as usual- means nothing. I have nothing against valid explanations of patent invalidity. Your “sniff” posts just don’t make it there. It’s really easy MM, make better posts and you won’t have any issues from me. Continue with your subpar vacuous and insult laden posts (in other words, the same ol same ol), and I will continue to rip your posts apart. The choice is yours.

Pretty sure that applies to most of these business method patents. Maybe you can randomly pull one of the patents that issued today and share it with us. You know, so we can call have a laugh together and bond over it. Sort of like gathering around a screen to watch a drunk German dude cannonball onto a sheet of ice. Good times.

MM: Does anyone practicing in this “art” really care about when their patent issues?

Yes, everyone.

MM: I mean, what are they going to do with the patent after it issues?

1. Openly practice the method without fear it will be copied with impunity.

2. Sue anyone that has practiced the method before the patent issued but after it was filed.

3. Collect royalties from all licensees and infringers.

MM: Why would anyone (patentee or competitor) give a hoot about a business method patent in 2012?

Because in the digital information age of 2012, new and useful methods for improving the quality and productivity for providing goods and services, is not only essential to the Constitutional mandate to promote the progress of the useful arts, it’s beneficial to everyone human being on the planet!

Yes, to remind everyone that while you pretend to be a champion of improving “examination”, you invariably oppose all attempts by other commenters to explain why a particular patent should perhaps not have been granted.

I suspect you knew this already but now it’s in plain black and white for you. Enjoy.

the USPTO will pick up the RCEs more quickly because the USPTO does not want to grant applicants more patent term.

More likely they’ll get to the first RCE quickly and then they won’t have to care about the public backlash from B delay at all. Which will only make these charts look worse. As if the general public ever has even a passing understanding or opinion of the minutiae of slightly longer terms for otherwise uncontroversial patents. And that’s assuming anything can be done about it at all, with current/projected budget and staffing.

Or they could just blame the statute, because heaven knows they tried to give out less PTA, but the courts just wouldn’t have it. Even though the PTO’s calculation is clearly the only semi-plausible legislative intent. Same as the one-click patent. It’s legally valid, so it’s hardly their job to block it.

In any event, their paying customers are thrilled to have the PTA, and Congress is in no mood to amend the patent law again so soon, so why should they care about public perception?

I’m pretty sure it did not come from the same people who were pushing for more patent term extension.

Since anon appears to have great trouble articulating his PTO Punishment Theory, I guess we’ll have to do it for him. The theory appears to go like this: the USPTO will pick up the RCEs more quickly because the USPTO does not want to grant applicants more patent term. The reason the PTO does not want to grant applicants more patent term is because the “public” hates patent term and if the “public” see patents issuing with long terms there will be a “backlash” against the PTO. The PTO really really really hates “public backlashes” which explains why they implemented Dudas’ “just say no” push and continue to implement it to this day.

Who doesn’t work for the PTO. So again, how does it adversely affect the PTO that they’re giving their clients added rights and benefits that cost them nothing to create?

For-profit businesses do that all the time as a business strategy, even to the point of giving away things that do cost them money, and I’m sure they don’t care if people who are not potential customers dislike them either.

That’s like saying the Office wasn’t penalized for passing out patents on one-click shopping or exercising cats with lasers.

Doesn’t seem to have cost them any business.

Sure, one or two arcane subcultures have circulated the cat-exercising patent and had a laugh, but it’s not like there’s some widespread grassroots rebellion against the patent system. People who say we should abolish it (for example) are still viewed as crackpots.

And in case you didn’t notice, the one-click patent is actually valid. What did you expect the PTO to do with it, and why should it reflect badly on them? Besides, it’s only encouraged more people to file patent applications on similar things. Business is booming.

That’s like saying the Office wasn’t penalized for passing out patents on one-click shopping or exercising cats with lasers.

LOL.

How was the USPTO “penalized” for mistakenly issuing those patents, anon?

In your opinion, is the Office being “penalized” now for issuing patents on methods of using a powerful computer brain to inform your grandma that you just parked your car in front of Billy Bob’s Corndog Stand?

I think you hit the nail on the head… the PTO has not been penalized for their slow uptake on RCEs b/c they did not count against them on the PTA. This was forcing everyone to file appeals instead, clogging up that avenue.

Now that the Court has said that RCEs after 3 years don’t hurt the applicant, I suspect we will see a swing back to that mode of prosecution again, and away from appeals.

Ned’s response seems like a reasonable explanation. Before the past year, about half of the RCEs I filed were filed after allowance and done so for the purpose of apprising the PTO of activity in related cases. I sense that there are fewer of such RCEs these days.

That being said, it is also not uncommon to wait a year or more (even in section 2800) to get an Office Action of Notice of Allowance following an RCE.

Currently, the PTO does not include *any* time consumed by RCEs within type B PTA. See 1.703(b)(1).

In Exelixis, the district court held that the PTO was misinterpreting 35 USC 154. The court held that type B PTA is based on the running of a three year clock. Filing an RCE tolls the running of the clock. If you file an RCE before the clock expires, then the clock may never expire, and never create type B PTA (type B PTA is granted day-for-day after the expiration of the 3 year period). In contrast, if you wait until the 3 year period expires, and then file an RCE, the RCE does not prevent type B PTA. According to the court, type B PTA continues to be granted day-for-day, no matter how many RCEs the applicant later files.

So if applicants can just wait until the three year deadline to file their first RCE, then they will receive type B PTA for every day consumed by RCEs. That will happen as long as the district court’s interpretation prevails.

How is it that I am able to find prior art that eludes so many of my fellow examiners? Much like the case of the Study in Scarlet (US 20020128081), all of the relevant facts were there in plain view to everyone. My colleagues may see the evidence, but they do not examine it.

KIP, I don’t fully understand the proviso regarding “so long.” Can you elaborate?

But, I agree that the PTO can no longer treat RCEs as continuations for delay purposes. This will force their hand on putting RCEs on the same footing as continuations for all purposes; otherwise Congress will get perturbed and heads will roll.

many of the RCE’s due to the long delays will be handled b y different examiners and/or different practitioners — due to commercial/technical developments the applicant may even have a different idea as to the scope of patent protection he desires

all of which contribute to further prosecution delays, something I thought that the PTO was trying to avoid.

In every case where I’ve filed an RCE in the last couple years, it’s been acted on very quickly. Often it’s simply a matter of reminding the Examiner that very few issues are remaining and it’s an easy thing for them to deal with.

Probably there are more than a few practitioners out there who are filing RCEs and taking advantage of the clock for one reason or the other. Some prefer to file notices of appeal to achieve similar results.

only 52% [business method] … of RCE filings received a next Action within two years of the RCE filing

Does anyone practicing in this “art” really care about when their patent issues? I mean, what are they going to do with the patent after it issues? Why would anyone (patentee or competitor) give a hoot about a business method patent in 2012?

Good point about the possible effect of increased rate of 2nd action allowances on the reduction in RCE’s. Another factor to consider is the increased use of the appeal process after final rejection rather than going the RCE route (or going second or third RCE). From what I can tell, practioners are much more likely to appeal a case today than, say, five years ago.

BTW, taking two years or more to act on an RCE seems to defeat what they were enacted for? Namely, to provide one additional amendment opportunity in the same application, with the same examiner, without the delays and cold-case prosecutions caused by using old fashioned “continuation” applications.

But re: “the growth in Request for Continued Examination (RCE) filings has leveled off” and “It appears that RCE filings have become less desirable, at least in part because the PTO is now responding to them much more slowly.”
I wonder if the authors talked to examiners personally off the record about that? I have the impression that the leveling off of RCE’s has far more to do with applicants getting more second action allowances these days and less often being effectively forced into RCE’s from the Dudas reject everything philosophy, plus major clients doing a better job of O.C. RCE cost-control?